Posted: September 13th, 2017

International Marketing

Paper, Order, or Assignment Requirements

 

 

Coursework Assignment Brief

 

Semester:	Autumn 2014
Module Code:	PM305
Module Title:	International Marketing
Programme	BSc (Honours)
Level:	Level 6
Awarding Body:	University of Plymouth
Module Leader	Liz Larner PM305
Format:	International Marketing report
Any special requirements:	All work should be submitted on the Student Portal along with a Turnitin Report
Word Limit:	2,500 (excludes appendices) Work in excess of word count will not be marked
Deadline date for submission:	Monday 15th December 2014, submissions close at midnight Submissions via Turnitin on the portal.
Learning outcomes to be examined in this assessment	Identify the principal managerial issues and policies necessary for success in international marketing. Examine and evaluate methods of identifying and qualifying market potential in different parts of the world. Illustrate the nature of overseas distribution systems (including agents and joint- ventures) and demonstrate the marketing implications of differences in culture in consumer behaviour.
Percentage of marks awarded for module:	This assignment is worth 50% of the total marks for the module
Assessment criteria	Explanatory comments on the assessment criteria	Maximum marks for each section
Research and situation analysis	Situation analysis to include: – internal analysis – external analysis Identification of specific challenges to company	30%
Constructive analysis and application of international marketing strategies	Evaluation of current situation linked to proposed strategic options for international growth, including justification of market selection for growth Identified and justified selected strategy with particular focus on relevance to target audience Outline of key aspects of marketing mix as applicable to the identified strategy	60%
Format and referencing,	Harvard referencing where relevant and appropriate. Appropriate report format	10%
Total		100

 

Candidates must clearly label their ID Number on additional separate reference, formula or answer sheets.

 

 

 

 

 

Summative Assignment Task:

This summative assessment represents 50% of grade.

All learning outcomes will be assessed.
Scenario

As a marketing consultant for new Moxy budget hotel chain, you have been asked to complete a strategic marketing audit to analyse both internal and external factors that are impacting on the organisations ability to develop internationally.

You have been given a particular remit to consider the changing nature of the global tourist industry to consider the future international market development for Moxy. Based on your critical analysis of the international hotel industry, assess the strategic options available to Moxy to develop its international presence. Recommend with justification Moxy’s strategy for international market development.

International Marketing Strategy Report

This should include:

• summary situation analysis
• evaluate strategic options for Moxy’s international strategic growth
• recommend with justification 1 of these strategic marketing options and associated market selection and entry strategy
• outline recommended marketing mix to support the recommended strategy

Notes on report:

• Please note analysis of case study research data and any additional data should be included in appendices in the form of a marketing audit. Please ensure you cross reference the marketing audit within the main body of the plan to ensure you receive relevant marks e.g. summary situation analysis to summarise key findings from detailed marketing audit in the appendices.
• You should use the data provided in the case study material but you can include additional research data.
• The focus of your additional research should be in relation to the academic nature of international marketing strategy development, as opposed to a lot of additional market data relating to the case.
• Please present in business report format

 

 

 

 

Supporting Case Study Material: Moxy

What we’ve seen

• Ikea has bought up a lot of development land in the UK and Europe and yet has not been getting permission to open superstores in every site it owns.
• Ikea has strong property acquisition and development skills.
• The company is already building homes. In Gateshead the first ‘flat-pack’ village, Boklok, has been built with Scandinavian-style timber-framed homes. It was developed in conjunction with  building company Live Smart At Home – a provider of affordable and supported housing.
• Ikea’s development plans include a Europe-wide chain of hotels under the Moxy brand, pitched at the budget hotel customer. These will be developed and run in conjunction with

Ikea in the UK

Ikea opened its first UK store in 1987 and currently operates 19 stores, 18 of which are located in the UK and one in Ireland. Future openings coming on stream include new stores at Reading and Sheffield.

Flat market conditions have depressed sales of furniture in the UK for several years. Also, the company has not been able to open any new stores since 2008. This has meant almost static levels of sales for Ikea.

Budget hotels in the UK

Mintel’s report Hotels – UK – October 2013 reports that the market for hotels is growing in the UK. In 2013 there were 160.2 million guesthouse nights in the UK, +14.4% on 2008. By 2018 this will grow by 11.7% to reach 178.9 million.

Budget hotels account for around 14% of the market by number of hotels and 23% of the market by number of rooms.  The leading groups in the market are the budget chains Premier Inn and Travelodge. These companies have a combined market share of 10% of UK hotels and 15% of UK hotel rooms.

During 2012 UK hotel supply increased by around 18,000 rooms, the highest increase over the past decade. Around 90% of new rooms in 2012 were branded. And the explosion in hotel development is continuing – around 3,300 new rooms opened in the UK by the end of 2013 and a further 15,000 will come on stream in 2014. Over half of all new rooms being built are expected to be in budget hotels.

Will Ikea’s new hotels contain Ikea furniture?

Marriott International launched its new economy tier, three-star hotel brand Moxy into Europe in March 2013, expected to arrive in the UK during 2014/15. Moxy, designed in conjunction with furniture company IKEA, is targeted specifically at what Marriott sees as a key emerging demographic, the ‘Millennial traveller’ (those born between the early 1980s and the early 2000s).

 

The first Moxy hotel will open near Milan’s Malpensa airport in 2015, with rooms priced at €60 (£52) to €80 a night. And Ikea is targeting further locations in cities across the UK and Europe. In the UK the first four sites will begin opening in 2015 at Westfield’s Stratford City Olympics site, Heathrow’s Bath Road (a 422 bed hotel), the Royal Docks in east London, and Liverpool’s Cropper Street.

The furnishings in guests’ rooms will not come from Ikea, though they will reflect the no-frills price of a night’s stay. But the hotels will be built with an ‘Ikea’ approach including pre-manufactured rooms complete with flat-pack fittings, manufactured in Italy and delivered across Europe. The bathroom amenities are reported to be ‘upscale’ and the colour tones planned for the hotel rooms will not feature the bright colours which are associated with some Ikea furnishings, but will be calming, neutral and have a natural theme such as leather-look and stone.

So Ikea’s motivation is not so much to create a showroom for the company’s home furnishing lines, but to capitalise on its skills in delivering excellent value for money. The company brings its property development skills to the party, along with a desire to make money outside of its core markets.

Opportunities for cross-marketing?

Ikea is not the first furniture retailer to open hotels in the UK. Laura Ashley opened its first hotel in August 2013. The Manor Hotel at Elstree is showcasing Laura Ashley furnishings. Guests sleep on the company’s beds, read by Laura Ashley lamps and enjoy the comforts of Laura Ashley furniture throughout the hotel. The interior also uses archive designs, some dating back to the 1950s. And Laura Ashley’s design team have a track record of working on interior design for other hotels before this.

So it would seem surprising if Ikea misses an opportunity to expose customers at Moxy hotels to its design ideas, its textiles and its housewares. Where else will people get the chance to actually sleep on an Ikea bed for the night, or experience an Ikea bathroom? And there could also be other cross marketing opportunities such as developing a loyalty scheme for customers of the hotels to benefit from the stores, and customers of the stores to use the hotels.

Extending brands

The Mintel Inspire Trend, Extend My Brand, looks at the ways established brands have begun to leverage their trust by extending into new categories. Brands in declining or heavily regulated markets are also extending into new territories and new sectors to survive, whilst others are using extension as a form of self-promotion in its own right. And for Moxy, any visitor from outside the UK there is scope for the brand to capitalise on people’s familiarity with the Ikea brand, setting the expectation of hotel standards.  There could be scope for the brand to become involved in facilitating trips, including shopping trips that take in a UK Ikea store!

 

 

What it means

• In a slow-growing and highly competitive retail market place Ikea is spreading its wings and looking for new channels of revenue.
• The budget hotel idea fits very well with Ikea’s value-for-money philosophy. And also gives the company development opportunities on land which are less suitable for retail outlets.
• Ikea’s design flair and cost control experience should help it create a chain that will stand out in the crowded budget hotel market place.
• For the future Ikea has a significant opportunity to use the Moxy hotel chain to build awareness of and loyalty to the Ikea brand.

The competition in the UK: low=frills, high teach

As the budget sector continues to grow apace, leading hotel chains are rolling out new pod brands, designed around a combination of small space (ideally suited to congested city centre locations), few frills, low prices but high technology.

 

In July 2013 the UK budget market leader Premier Inn announced its new ‘hub by Premier Inn’ brand. Rooms will feature an en-suite bathroom, wardrobe, desk, bed and a 40” smart screen television, contained within a space of 11.4 square metres.

 

Guests will be able to control lighting and room temperature using a mobile phone app. They will also be able to pre-order breakfast and change the television channel so their favourite programme is on when they arrive. According to owners Whitbread, room rates will be up to 30% cheaper than existing Premier Inn hotels.

 

 

citizenM has launched its first London venue with two more properties to follow in the capital in 2014. The boutique capsule concept is designed around ‘affordable luxury’ with rooms offering a king-size bed, wall-to-wall window and a screen MoodPad that enables guests to control the television, window blinds, temperature, coloured lighting and wake-up alarm themes. Wi-Fi and iMac computers are offered free of charge along with the services of a 24-hour snack/drinks bar canteenM. The brand describes its target market as ‘frequent traveller, value conscious, multi-cultural, free-spirited, tech savvy, informed, social, international, contemporary and urban’.

 

 

Source: Mintel Report 226.3.14

 

 

 

Additional Moxy Case Study Data:

Hotel Trends – February 2014

Overview

Total spending on travel and tourism is projected to have risen by over 40% in real terms (all amounts stated in 2011 US Dollars) between 2012 and 2020. Growth in leisure travel spending is forecasted to slightly outpace that of business travel spending, which supports the move of some major hotel chains to create all-inclusive resorts, as detailed below in this report.

 

FIGURE 1: Projected spending on leisure & business travel, 2012-20

(in 2011 US$m)

World	2012	2013	2014	2015	2016	2017	2018	2019	2020	% change 2012-20
Leisure travel spending	3,222.1	3,324.1	3,479.7	3,652.7	3,823.2	3,999.8	4,184.6	4,375.2	4,570.5	+41.8
Business travel spending	1,017.4	1,048.9	1,103.5	1,161.1	1,214.2	1,266.2	1,318.0	1,369.7	1,418.8	+39.4
Total	4,177.8	4,309.9	4,518.0	4,746.3	4,967.8	5,193.9	5,427.8	5,667.4	5,909.1	+41.3

 

 

Source: WTTC

 

Otherwise, spending on domestic travel is expected to grow faster than incoming receipts. This is mainly due to the rapid growth of travel (both leisure and business) spending in the large developing countries – notably the BRICS (Brazil, Russia, India, China and South Africa), where tourism is overwhelmingly domestic.

 

 

FIGURE 2: Projected incoming receipts & domestic travel spending, 2012-20

(in 2011 US$m)

World	2012	2013	2014	2015	2016	2017	2018	2019	2020	% change 2012-20
Incoming receipts	1,243.0	1,282.0	1,343.7	1,409.8	1,466.6	1,525.1	1,587.2	1,650.1	1,714.7	+38.0
Domestic travel spending	2,934.8	3,027.9	3,174.2	3,336.5	3,501.2	3,668.8	3,840.6	4,017.3	4,194.4	+42.9

 

Source: WTTC

 

According to Mintel estimates, the total number of hotels in 20 major country markets worldwide should have advanced by about 20% between 2011 and 2016. Unsurprisingly, the greatest growth is projected for developing countries – the BRICs in particular – led by India, China and South Africa. Two South East Asian nations – Indonesia and Vietnam – are also slated for rapid growth, with the number of hotels projected to have risen by over 40% by 2016. Meanwhile, the drop in the total number of hotels forecasted for Australia and Japan does not necessarily imply a reduction in total accommodation capacity, but rather an increase in the average size of property. In Japan, for instance, small traditional inns – called ryokans – are being progressively replaced by larger standard hotels.

 

FIGURE 3: Trend in the number of hotels in 20 leading country markets worldwide, 2011-16

Region	2011	2012 (est)	2013 (fore)	2014 (fore)	2015 (fore)	2016 (fore)	% growth 2011-16
Australia	5,990	5,957	5,902	5,840	5,772	5,700	-4.8
Brazil	27,250	27,686	28,164	29,019	30,153	31,207	+14.5
Canada	8,486	8,569	8,575	8,631	8,650	8,693	+2.4
China	80,776	87,276	97,339	107,933	120,100	128,505	+59.1
Colombia	7,572	7,970	8,346	8,725	9,106	9,494	+25.4
France	58,500	59,100	60,400	61,600	62,900	64,200	+9.7
Germany	45,600	46,203	46,698	47,434	48,160	48,881	+7.2
India	52,640	58,860	64,940	72,650	80,620	89,630	+70.3
Indonesia	15,283	16,551	17,636	18,954	20,398	21,881	+43.2
Italy	77,350	77,650	78,340	80,110	82,510	85,430	+10.4
Japan	79,066	77,727	76,196	74,566	72,932	71,302	-9.8
Mexico	17,294	17,975	18,470	19,072	19,646	20,278	+17.3
Russia	5,655	5,956	6,254	6,540	6,787	7,045	+24.6
South Africa	5,320	5,668	6,054	6,427	6,863	7,355	+38.3
South Korea	711	726	749	773	795	818	+15.0
Spain	35,114	36,031	36,907	37,401	38,143	39,231	+11.7
Turkey	12,721	12,635	12,655	12,943	13,281	13,629	+7.1
UK	46,388	46,348	46,625	46,932	47,762	48,285	+4.1
US	51,210	51,700	52,100	52,500	52,800	53,200	+3.9
Vietnam	13,000	13,706	14,677	15,718	16,986	18,296	+40.7
Total	645,926	664,294	687,027	713,768	744,364	773,060	+19.7

 

 

Note: est = estimate; fore = forecast

Source: Mintel Travel Accommodation – 2013

 

Trend Information

• Brands continue to proliferate with new offerings, which emphasise ‘lean luxury’, health and fitness, social networking and technology, and target the millennial cohort in particular.
• Hilton is attempting a comeback in the lifestyle segment following the failed launch of Denizen in 2009.
• Marriott is entering the economy segment with its Europe-centred ‘cheap chic’ Moxy concept that targets ‘Millennials’.
• Non-affiliated hotels are especially dependent on online travel agencies (OTAs), which typically generate 70-80% of their online bookings.
• Priceline’s Booking.com and Expedia are consolidating the OTA sector, but Booking has the advantage due to its destination-oriented structure.
• Metasearch is becoming a dominant force in hotel distribution. Kayak, owned by Priceline, and Trivago, a unit of Expedia, are leading examples. The guest commentary site, TripAdvisor, is increasingly being used as a metasearch tool and Google has launched Google Hotel Finder, which enables travellers to search hotels by location, price, star grade and guest appreciation score.
• The future of mobile devices as hotel booking tools is being enhanced by Hotel Tonight, who have developed an easy-to-use app for last-minute hotel bookings in some 200 cities worldwide.
• New York-based Loews Hotels & Resorts has become the first chain to offer booking possibilities on Twitter.
• Some traditional hotel services, such as reception desks, room service and minibars are falling by the wayside, due to social and technological evolution.
• Hotels are using technology both to save costs and enhance the guest experience.

Source: Mintel Hotel Trends– 2014
 

Ikea Store Location

As of August 2014, IKEA owns and operates more than 350 stores, in some markets it operates franchise arrangements.

 

Country	Debut	No. of stores
Australia	1975	7
Austria	1977	7
Belgium	1984	6
Bulgaria	2011	1
Canada	1975	12
China	1998	15
Croatia	2014	1
Cyprus	2007	1
Czechoslovakia (to 1992) Czech Republic (1993 on)	1991	5
Denmark	1969	5
Dominican Republic	2010	3
Egypt	2013	1
Estonia	TBA	0
Finland	1996	5
France	1981	30
Germany	1974	46
Greece	2001	5
Hong Kong (to 1997) Hong Kong (1997 on)	1975	3
Hungary	1990	2
Iceland	1981	1
India	TBA	0
Indonesia	2014	0
Israel	2001	3
Italy	1989	21
Japan	1974 – 1986 (initial), 2006 (reentry)	5
Jordan	2014	1
Kuwait	1984	1
Latvia	TBA	0
Lithuania	2013	1
Malaysia	1996	1
Morocco	TBA	0
Netherlands	1978	12
Norway	1963	6
Poland	1991	8
Portugal	2004	3
Puerto Rico	2013	3
Qatar	2013	1
Ireland	2009	1
Romania	2007	1
Russia	2000	14
Saudi Arabia	1983	3
Singapore	1978	2
Slovakia	1992	1
South Korea	2014	0
Spain	1980	20
Sweden	1958	19
Switzerland	1973	7
Taiwan	1994	5
Thailand	2011	1
Turkey	2005	5
Ukraine	TBA	0
United Arab Emirates	1991	2
United Kingdom	1987	18
United States	1985	38

 

Source: Ikea.com